The next stage in West-East power transfer has begun. But does it herald the end of financial nationality?

HSBC and Standard Chartered are among a range of global banks – including such names as Citigroup and J PMorgan – currently holding seminars around Asia, Europe and even the USA to promote the Yuan as the best means of settling China trades from here on in.

As always, the Western banks recognise no national loyalty, falling into line with what they know to be a top priority among the leaders of the Beijing regime. Standard Chartered in particular fronted Chinese central bank officials on a roadshow to Korea and Japan during June this year. Spain’s second-biggest bank BBVA is also drawing up plans for a global marketing campaign that will focus on Latin American companies exporting to China.

China has moved forward on a broad front to externalise use of its currency in recent months, working hard to establish Hong Kong as the global centre for offshore Yuan business. But on a broader canvas still, two massive trends are apparent here.

The first is the addition of the Yuan to that accepted range of international deal-settling currencies – something that has been inevitable for some time. The second is even more potentially transformatory: the approaching hegemony of globalist banks over any individual nation.

The Slog’s view is that, however set this second trend may seem, it will be reversed by events to come in the next two years. Globalism is doomed by any number of factors; and in that context, banks will become instruments of imperialism – and defence against them – as never before.

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8 thoughts on “BREAKING: Global banks call time on the Dollar”

I can see why the Yuan could become a safe haven currency or a hedge against Western currencies.Can you explain your view that "globalism is doomed by any number of factors…" and why "banks will become instruments of imperialism". I would have thought that a bank would be concerned with making money and will only lend money if there is a profit invoved. If the arrangement helps one country fight a war with another country then that can be arranged too. The bank is an instrument but is not controlled by any particular government. Whoever has the cash is in control surely and globalism ensures this can be the case ? How on earth can globalism be doomed ????

Anon(I'm assuming this is the same anon who doubts the Wyoming story)For starters, http://nbyslog.blogspot.com/2010/07/opinion-federal-reserves-statement-is.html.Main course to follow, http://nbyslog.blogspot.com/2010/05/give-me-disconnected-world-any-day.htmlAdd to these the ecological stupidity of the system,and sooner or later somebody will grasp that it's just Very Big mercantilism – which can never work.Globalism is a systemic idea devoid of insight about social anthropology. It is doomed to failure – it has already failed for most people involved in it.The point about imperialist banks is a contentious one, I accept that. It's based on my view that China will be running most things of any importance within 20 years. Chinese banks do as they're told.Playing second fiddle to the Chinese will be the Arabs in general, and the Saudis in particular. Saudi banks also do as they're told, otherwise loss of limbs may result.The Yuan is a hedge in some ways, but the Chinese roadshow is being developed to ensure its takeover of the world trading currency status from the Dollar. The banks are doing as the Chinese tell them – quite wittingly.Ergo sum, banks will become instruments of geopolitics.

'Chinese banks do as they're told.'Really John or is that bollocks?Here's a couple of articles for you to mull over.The first, the suspension of Loan repackaging by banks in June.From the article:'China's banking regulator has ordered trust companies to halt cooperation with banks in order to prevent banks from dodging regulations. For years, China's banks removed loans from their balance sheets by packaging them as wealth-management products issued by trust companies.'The CBRC ordered the 12 largest trust companies last month to slow their pace of expansion and pay more attention to legal compliance. The 12 companies obeyed the order but smaller trust companies worked with commercial banks on wealth management products.In 2009, China's commercial banks lent 9.59 trillion yuan in yuan-denominated loans.In 2010, the banking regulator set the target for new yuan-denominated lending at 7.5 trillion yuan. However, banks have the desire to lend more in order to boost profitability and expand market share.http://english.caing.com/2010-07-06/100158624.htmlHere's an optimistic view about Mortgage risk in China. a 30% offical stress test fall. Where much of the development capital has been expended, property. 3% wafer thin export margins currently enjoyed by companies will not make anyone rich.'The results of the stress tests are contradictory to the perception that banks are taken hostage by high property prices.'http://english.caing.com/2010-05-07/100142069.htmlNow how about a little offical chinese vacancy rates from a district in Beijing? The first of its kind, hot off the press.From the article 26/08/10:'Chaoyang District's housing vacancy figures are the first of its kind to be issued in China, amid growing fears of a property bubbleBeijing's largest district Chaoyang has issued figures showing that a total of 1.33 million square meters of residential space are vacant. Over half of the space has been empty for at least three years.''Among the empty residences, villas and luxury apartments totaled 521,000 square meters, accounting for 39.2 percent of the total and 54.9 percent of homes have remained empty for over three years. Ordinary flats accounted for 18 percent of the empty residential space, according to the report.'But the report failed to make the distinction between unsold housing or the commonly believed unoccupied housing after sales.With rising fears of an emerging property bubble, market concerns over the housing vacancy rate across China have deepened. However, little official data has been released. The Chaoyang District housing vacancy report is the first of its kind.According to earlier media reports, 64.5 million urban electricity meters registered zero consumption over a recent, six-month period. But the figures were denied by power companies.http://english.caing.com/2010-08-26/100174332.htmlGet the feeling tulipmania has hit china?Over 50% of the vacant housing unoccupied for three years in the largest district of Beijing, a city I am lead to believe has startling growth potential.Still at prices 18 times the $3,900 average salary what do you expect? Or are they speculator assets just being bought and sold time after time for a quick profit? Is anyone paying rent? What happens when the music stops?There's a name for this type of scheme. How long will it continue? Remember this is the Chinese dragon that will power the world from depression.

'Chinese banks do as they're told.'Really John you sure about that?Trust companies have been suspended from issuing wealth management products packaged from bank loans since July.China's banking regulator has ordered trust companies to halt cooperation with banks in order to prevent banks from dodging regulations. For years, China's banks removed loans from their balance sheets by packaging them as wealth-management products issued by trust companies.In June, the volume of new wealth management products packaged from bank loans reached 777.8 billion yuan, up 30 percent from May.The CBRC ordered the 12 largest trust companies in June to slow their pace of expansion and pay more attention to legal compliance. The 12 companies obeyed the order but smaller trust companies worked with commercial banks on wealth management products.In 2009, China's commercial banks lent 9.59 trillion yuan in yuan-denominated loans.In 2010, the banking regulator set the target for new yuan-denominated lending at 7.5 trillion yuan. However, banks have the desire to lend more in order to boost profitability and expand market share.3% export margins for many companies are not going to make anyone rich.Money's gone into property. The following article hot of the press is the first offical report on Housing vacancy in China.'Beijing's largest district Chaoyang has issued figures showing that a total of 1.33 million square meters of residential space are vacant. Over half of the space has been empty for at least three years.' Xie estimated that the vacancy rate for the China's private, commercial housing stock is between 25 and 30 percent, at least double compared to normal market conditions. Xie said the value of the inventory held by speculators probably accounts for around 15 percent of GDP.According to the Chaoyang district report, from January to July, property investment in the district reached 44.63 billion yuan, up 17 percent year on year. During that period, commercial housing sales totaled 1.45 million square meters, down 57.4 percent year on year.http://english.caing.com/2010-08-26/100174332.htmlStill with average sales price 18 times the $3,900 average wage I suppose few can pay the rent. Has tulipmania hit china?

AnonI'm something of a sinophile myself, so I'm aware of the Fred Karnos that exists there. But I don't really think you'll find any examples of bankers blatantly ignoring what Beijing says – or at least any whose heads are still attached. Chinese bankers are no different to other bankers EXCEPT in one respect: China First.In this sense, they resemble the German and Japanese bankers after 1945.But yes, tulipmania has hit China, without a doubt. But when the jackboot comes down, obedience is the general rule.